Removing Cyprus' emergency support could see the country's two largest banks, Bank of Cyprus and Laiki, collapse within days.

Carston Brezki, senior economist at ING, described the ECB's move as a "gun at the head of Cyprus."

But he expressed doubt if the ECB would really switch off Cyprus' financial life support.

"It is hard to imagine that the ECB would really be willing to be the one to pull the trigger," he noted.

The Cypriot government of president Nicos Anastasiades is now scrambling for a Plan B to put to the eurozone, involving alternative ways to raise the €6 billion contribution on which the eurozone's €10 billion bailout package is conditioned.

Using the island's natural gas reserves, pension funds or state-owned assets as collateral have all been mooted as possible means to raise the cash.

A set of bills were tabled yesterday in Nicosia, including plans to create a state investment fund to raise Cyprus' contribution.

The Cypriot parliament is also expected to vote on legislation to impose capital controls restricting the amount of money customers can take out of their bank accounts when, or if, they reopen next week.

Cypriot banks, which have been shut since the rescue plan was agreed by finance ministers in Brussels , are expected to remain closed until next Tuesday in a desperate bid to avoid a bank run with account holders panicking at the prospect of losing their savings.

Meanwhile, finance minister Michalis Saris will remain in Moscow for a third day of talks with Anton Siluanov, his Russian counterpart.

Despite reports linking Gazprom to a multibillion euro loan to Cyprus in exchange for access to the island's recently discovered natural gas reserves, time is rapidly running out for a formal offer to be made.

Panicos Demetriade, governor of the Cypriot central bank, insisted that the deadline would be met.

"We will have a programme of support for Cyprus by Monday," he said.

In a further blow, rating agency Standard & Poor's downgraded Cyprus to CCC, a junk status that is only two notches above default.

Following a tense telephone conference between eurozone finance ministers on Thursday, the Eurogroup issued a statement that it is "prepared to continue negotiations on an adjustment programme."

It added that it "reaffirms the importance of fully guaranteeing deposits below €100,000" in the EU.